Interest Rates Comparison To Find The Right Fixed Deposits

  • Added:
    Apr 01, 2014
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    1377
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Interest Rates Comparison To Find The Right Fixed Deposits Photo by Aishwarya Mahurkar

Traditionally speaking, most investors considered identifying the right fixed deposit to be as easy as visiting a bank and opening an account. With the current economy, most banks compete with each other for your money. So, they offer the best interest rates they can. It won’t be as easy as visiting a third party website to check out all the interest rates though. If you do visit these websites, you can find the bank that offers the highest interest rate on the fixed deposit schemes . There are a few other considerations too, that are important for savvy investors.


Organization


There are several organizations that offer fixed deposits today. All nationalized, cooperative, private and foreign banks, select mutual funds, select companies and the Indian postal service offer term deposits. So, you should evaluate all these organizations to select the best one possible. Company FDs have higher returns and an even higher risk, just like cooperative bank FDs. Nationalized banks and the Indian Post offer higher safety and lower returns. Hence, evaluate all these options based on your investment agenda.


Investment agenda


For investors looking for a high yield, FDs are not the ideal choice. You must invest funds as per your agenda so as to choose the right investment tool, organization and amount. The most popular reasons for investing in low risk and low gain tools like the FD are:

• To earn interest
• To maintain liquid assets
• To have spare cash for an emergency like an accident or a surgery
• To diversify the investments
• To invest for a certain long term objective such as a gift for a minor


Specifications:


Based on your agenda, you can narrow down the specifics to look out for in the fixed deposit options. For example: If you want to save some extra cash for an emergency, you can read up on the premature and partial withdrawal penalty. If you want to diversify your investments, then you won’t invest the entire sum in one organization. Company FDs and fixed deposits in banks  can make a great choice. You can’t invest anything more than 1 lakh rupees in any bank, though, as this is the maximum limit of insurance on these term deposits.

If you have chosen your specifications well, you can end up with the best possible investment. While this process may seem a bit complicated when compared to just choosing the highest interest, the result can certainly be a useful investment for you.

Author's Profile

An experienced writer on finance topics, the author articulates of investment choices such as interest rate on the fixed deposit schemes & recurring deposit schemes. She writes about a variety of topics including the benefits of recurring & FDs and fixed deposits in banks and how to make the right investment choice.


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